Working with external counsel: Building innovative and strategic partnerships

At Practical Law’s GC Leadership Summit last week, one demand was repeatedly made of external counsel by in-house lawyers: know our business. This doesn’t just mean knowing what a company sells, its share price, or where its offices are, which some firms still fail to familiarise themselves with. These are important, but in-house counsel want and expect more than that; they want their retained lawyers (or those pitching to them) to really understand their business and their sector.

For example, what does the company sell? Is it food? A particular type of food? Who are its clientele? What type of service does it offer? What does life look like on the ground – for a waiter, a shift manager or a member of HR? What are the company’s values and how does it endeavour to implement them in practice? What is its appetite for risk and the factors affecting this? What are the key issues affecting the sector – perhaps staffing concerns as a result of Brexit or the threats and opportunities posed by the gig economy and food delivery industry? Or something else?

Many of these factors cannot be gleaned from a website or wider due diligence, but they are nevertheless important to learn as, in many cases, they are what make a company tick and are the issues that occupy in-house counsel’s working life day to day. But how can this insight be achieved?

Food for thought

An interesting, if unusual, example of how a law firm sought to understand its client’s business was provided at the GC Leadership Summit. The client was a restaurant chain and the pitching law firm promised, should it be awarded the contract, to commit a certain number of its fee earners to working at the client’s restaurants for several weeks.

This way, from taking orders and serving food, working shifts (at potentially even more antisocial hours than in private practice), and being alongside real people on the ground, the lawyers could get first-hand experience of the company, its people and its issues, as well as the culture and language of the sector – which will vary depending on whether they are “FOH” or “BOH”.

This may not be a practical option for most law firms, but it does nevertheless illustrate the lengths that some firms are going to understand their clients and win and retain business.

Client secondments: an underutilised opportunity

Client secondments are something that most large and mid-size law firms offer, and it has become the norm in many instances for key clients to be provided with a rotating supply of trainees or associates, with some companies having secondees from several different firms at a time.

At a basic level, a secondment has the potential to benefit all parties to some extent. For example, it helps the in-house team to deal with workflow at lower (or deferred) cost, enables the secondee to build connections and enhance their commercial awareness, and provides an opportunity for firms to demonstrate their loyalty and commitment to the client. There are undoubtedly costs to the firm for providing this service, including the loss in hours billed to other clients by the reallocated team member.

The feedback from a number of in-house lawyers at the GC  Leadership Summit was that firms frequently underutilise the opportunities provided by seconding employees to their business, despite the costs it incurs. It was suggested that firms rarely seek detailed feedback from secondees on their experience, which impacts negatively on both the firm and the client.

For the client, it is in their interest for the secondee to hit the ground running and provide value as soon as possible, as it takes time and resources to train them. With a constant rotation of secondees, it often becomes a source of irritation for companies when each new secondee arrives with little pre-existing knowledge of the company. One imagines that risk appetite, employment practices and sectorial issues are difficult to cover in a handover note, however this lack of information exchange pushes an unnecessary level of burden on to the in-house team and undermines the potential value of the secondment, both to the client and to the firm.

How to make the most of secondments

It was recommended at the GC Leadership Summit that secondees should deliver internal presentations on their experience in-house, to better inform the firm on the company’s current aims and challenges, as well as its culture and people. If nothing else, this reduces the burden on the client to train each new secondee.

Surely firms, particularly those with a sectorial offering, would benefit from the secondee’s first-hand experience. Knowing a client’s real appetite for risk, its growth strategy and the characters of the GC and others making decisions, is invaluable information for a corporate team seeking to work with that client. As is information on brand management for the intellectual property team and concerns around GDPR compliance for the technology and data protection and privacy teams, for example.

Institutional insight is the key. A secondee  working in the employment team, say, is likely to provide valuable intelligence for other practice areas that will help the firm cross-sell different services to the client – potentially providing exponential value to the firm from the placement. In depth knowledge transfer between secondees will also enable the incoming team member to hit the ground running and save the in-house team time and resources bringing them up to speed on basic aspects of the company. Feedback at the Summit suggests this would be gratefully received.

Opportunity to grow

It appears from the GC Leadership Summit that law firms still have a way to go in understanding what clients want. Most clients do not expect law firms to provide fee earners to clean the dishes or mop the floors, but they do expect firms to really know their business and the sector in which it operates; and many firms are underutilising the opportunities that secondments provide to gain this invaluable insight. In-house lawyers might bear this in mind and consider driving this agenda harder as law firms compete for their business in a crowded marketplace.

Practical Law In-house Jemma Emmerson

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